Apple Online Store Strategy

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GROUP B
_Choose three core competencies of Apple Inc. How did these competencies allow Apple to make sense out of the recorded music industry in the early 200’s? How did they set the company up for robust first user advantage? How stable do those advantage seem now? (See Jay Barney’s Looking Inside for Competitive Advantage; Zook’s Finding Your Next Core Business). As the Internet based recorded music segment continues to evolve into other devices, will Apple’s competencies continue to generate advantage versus suc competitors as Research in Motion and Dell Inc.?_ Apple today is the leading player in the internet music industry with over 6 billion songs downloaded since the launch of its iTunes online music store, which today contains more than 10 million songs. Apple introduced iTunes and its online music store in 2001 when there were several major players, such as Amazon and Napster, competing for the market. However, Apple was able to outperform these competitors with its three main core competencies, software, retailing and branding. In 2003, Apple introduced the iTunes online music store that allowed customers to purchase and download songs directly from the store to their computer through iTunes, and then transfer them directly to their iPods. By that time, most of Apple’s competitors offered their customers songs through subscriptions, however they did not provide customers full control of the songs they purchased, i.e., songs purchased would be lost once customer no longer subscribed. Apple was able to offer customer a whole new way of selling songs to customers. They allowed customers to buy songs like CDs, cassettes in store and never had their songs lost since there were no subscriptions required. In addition, Apple also allowed the customer to preview the songs they intended to purchase in order to avoid downloading the wrong songs. In order to be able to allow customers to purchase songs for a low cost, Apple managed to negotiate a landmark...
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